Earlier in the week came distressing news from many manufacturers of PC components and now Intel has made their financial state a little clearer. The Register has posted the numbers, predicted earnings for Q1 of this year have dropped from USD13.7 billion +/- $500 million, down to USD12.8bn +/- $300 million. Losing about a billion dollars in profit is going to hurt anyone, even the mighty Intel. The drop in the PC market comes from a variety of sources but two of the most likely candidates are the lack of cash in consumers pockets to upgrade and a lack of competition driving an urge to upgrade. Once many gamers would willing live on ramen noodles for a time so that they could afford the next GPU or CPU upgrade thanks to the impressive performance increases the next generation offered. Now new releases tend to offer a small incremental performance increase and occasionally new features which are impressive but nowhere near what an upgrade 10 years ago offered. Certainly part of the issue is the difficult of coaxing a bit more performance out of silicon and with the reduced competition it is less financially attractive to fund expensive and risky R&D projects than it is to work on small incremental increases in efficiency and performance.

Here's hoping for a change to this market in the coming years.

"Intel has lowered its revenue forecast for the first quarter of its fiscal 2015 by nearly a billion dollars, citing a weaker than expected PC market."

Intel has pulled out some spare change to upgrade its plant in Chengdu, in what analysts are predicting will be focused on Intel's ultra-mobile chips. It certainly comes at an interesting time for the market, Google and Microsoft have both had recent unpleasantness with the Chinese government while Qualcomm, a direct mobile market competitor, is about to fork over what could be a record breaking settlement to Chinese anti-trust investigators. This could make talent from Qualcomm available for Intel to hire as well as giving them even more of a financial advantage. It marks a change in the recent trend of Intel to invest heavily in their US assets and reinforces their desire to make headway in the current ultramobile market and the burgeoning Internet of Things. Check out the links at The Register for a bit more background on the state of this market.

"Chipzilla has decided to take another run at the mobile chip market, announcing plans to spin as much as US$1.6 billion in the direction of its Chengdu plant in China to achieve its aims."

Symantec is splitting its self down the middle, with one side focusing on their antivirus and security products, which apparently still sell and are not just bundled with new laptops and computers, and the other handling information management. Considering they made nearly $7 billion last year someone must be buying their software and even more shocking they must be renewing the license which came with the new machine. Those commenting on Slashdot immediately tried to help Norton out by suggesting that one side should create and spread viruses while the other should come in like a white knight and slay them. That would certainly make it a more interesting read; even so the fact that Symantec is still alive and prospering is enough of a shock for a Friday morning.

"Symantec announced plans on Thursday to split into two separate, publicly traded companies – one focused on security, the other focused on information management. The company's security business generated $4.2 billion in revenue in fiscal year 2014 while its information management business meanwhile hit revenues of $2.5 billion. "As the security and storage industries continue to change at an accelerating pace, Symante c's security and IM businesses each face unique market opportunities and challenges," Symantec CEO Michael A. Brown, who officially took over as CEO last month, said in a statement."

At a mere $7.2 billion, Microsoft just picked up all of Nokia's devices and some of their software in an attempt to streamline production and win market share from Apple and Android devices. Nokia tends to be the manufacturer that people think of when they think of Windows phones, with HTC a close second. The current market share of Windows phones is minuscule and for that matter so is Nokia's; what might not be clear from some of the stories you have been reading is that Nokia has a large share of the phones currently being manufactured. As you can see from the Reuters graph below they are actually second only to Samsung in terms of manufacturing, this existing infrastructure may help Microsoft greatly as they structured as a software company ... Surface being the exception that proves the rule.

From Reuters

The Inquirer believes this could mean a resurgence of competing mobile OS designs, with Google owning Motorola it seems likely that Samsung and HTC are going to want to diversify their lineup of phones even though Google has suggested they will not provide preferential treatment to Motorola. Microsoft may still provide licenses to HTC but with this major change you can expect the rumours of HTC developing a mobile OS to become verified as well as a lot more news on Tizen, Samsung's home grown OS. Blackberry could be doomed at this point, with nothing unique to offer in the way of secure connectivity now that they have moved to ActiveSync and dated hardware they are reduced to a niche market consisting solely of those who want a physical keyboard on their phone. This purchase is as painful to Finland as the death of BlackBerry will be for Canada.

The other interesting part to this story is the return of Stephen Elop to Microsoft as he only left them in 2010, previously he headed their business software division. You can follow the odds on his likelihood of taking the reins from Ballmer by following the link from this article; Stephen has tossed hardware across a room so he is certainly qualified. If he did take over Microsoft it would signal a 'mobile first' mentality which might help sales of Win8 on mobile devices but would not bode well for the desktop users. If he is not placed in charge of the entire company it would likely mean that we will see him head a mobile division while someone else handles a desktop OS. That has not worked well for Microsoft historically, we shall see in the coming months which direction the company chooses. Hopefully they will remember they sell a server OS.

"MICROSOFT SURPRISED NO ONE on Tuesday when it announced that it picked up Nokia's devices unit and licensed some of its software for a cool £4.6bn in cash. While many see the deal as two struggling companies merging for a final shot at success, we think the deal should have Apple and Google worried."

The hard numbers have arrived and AMDs quarter was every bit as bad as investors had feared, with a non-GAAP net loss of US$150 million and a $0.20 loss per share. The actual income for this quarter was $1.27 billion, the low end of the predictions that were made by analysts and with the sluggish movement in the PC market the choice has been made to lower operating costs as opposed to trying to increase revenue. To do so they will be reducing their global workforce by 15% over the coming quarter and restructuring the company with the goal of reducing operating costs by 25% so that a $1.3 billion dollar quarter would be a break even point, not a loss. The Register details other changes Rory Read is planning on implementing, more of a focus on chips for servers and embedded cores and SoCs for communication and industrial applications. As well AMD's win on the console side, with the Sony PS4 using AMD for both CPU and GPU as well as the WiiU which will use an AMD GPU and the as yet unnamed new XBox, all of which will garner licensing incomes for AMD for years to come. The talk about ultra-low-power chips for tablets and ultrabook like products is hopeful, though it is unlikely to be a major revenue source it would be a good move to attempt to grab more market share in that segment. DigiTimes also weighs in here.

"One week ago, AMD warned investors that its financial results for its third quarter of 2012 were going to be worse than it had previously estimated, with revenues down about 10 per cent from the previous quarter rather than the 1 per cent, plus or minus 3 per cent, that they had forecasted earlier.

They were spot on – not that being correct about such a disappointing result will win them many friends on the Street.

After the markets closed this Thursday, AMD announced that its Q3 2012 revenues were $1.27bn, which hit that prediction of a 10 per cent quarter-to-quarter slippage."

Micron has been very busy lately, spending $2.5 billion USD to purchase Elpida and another $334 million USD to purchase another 24% of DRAM maker Rexchip from Powerchip. The latter of those purchases gives Micron a total of 89% of the existing shares of Rexchip which may not give them outright ownership of Rexchip but gives them such a huge majority that they can determine the outcome of any vote which is presented to shareholders. Rexchip brings a single 300mm Fab working on 30nm process to the table, which gives Micron a bit more manufacturing capability to utilize for what is likely to be a busy season for them.

The Elpida purchase is much bigger for both the industry and Micron, especially as they decided to buy the company outright instead of purchasing a subsidiary or only the IP of Elpida. Instead the company will remain intact for the near future though there will likely be changes to the executive structure as they are integrated with Micron. Not only does this purchase give them access to all property, intellectual or physical, that Elpida currently possesses it give Micron an in at Apple as it was Elpida that supplied much of the chips used by Apple. That would put Micron in the enviable position of supplying both PC and Apple products. DigiTimes breaks down the deal here.

"Micron Technology and Elpida Memory's trustees have signed a definitive sponsor agreement for Micron to acquire Elpida, according to the US memory chipmaker. The agreement has been entered into in connection with Elpida's corporate reorganization proceedings conducted under the jurisdiction of the Tokyo District Court.

Micron revealed that under the agreement, JPY200 billion (US$2.5 billion) total consideration and less certain reorganization proceeding expenses will be used to satisfy the reorganization claims of Elpida's secured and unsecured creditors. Micron will acquire 100% of the equity of Elpida for JPY60 billion to be paid in cash at closing."

I got your $13.9 Billion over here...

Intel had a record quarter. Are we tired of hearing that yet? I guess that depends on who a person is investing with. Earlier this quarter Intel warned that their results could be negatively affected by the current hard drive shortage that we are experiencing. Apparently, this was a factor, but it did not stop Intel from still having a record quarter.

Q4 2011 turned out to be gangbusters for Intel. They reported gross revenue of $13.9 billion, which is significantly higher than the expected $13.74 billion analysts were predicting. Net income came in at $3.4 billion with an impressive 65.5% gross margin. The overall year was also record setting at $54 billion gross revenue and $12.9 billion net income. For comparison, AMD has a gross revenue of about $6.8 billion and a net income of around $300 million. 2010 was a record year for Intel in that they surpassed $40 billion in revenue for the first time in the company’s history, and this year saw revenue over $10 billion higher. Intel is certainly hitting their stride, and they do not look to slow down anytime soon.